When Climate Becomes the Ballot’s Burning Issue
By-elections at the end of July spurred debate over the UK’s bearing on green policies, the turning point being the Labour Party’s defeat in Uxbridge. The Labour Leader, Keir Starmer, blamed the campaign for a larger Ultra-Low Emissions Zone (ULEZ), an initiative promoted by The Mayor of London Sadiq Khan aimed at reducing respiratory diseases. So why was this move so unpopular amongst voters? Essentially, it is viewed as a regressive tax, something which angers citizens during the current cost-of-living crisis. This, one can sympathise with, since it affects those who cannot afford to replace an older, more polluting car.
Nonetheless, the Tory response to its victory is worrying.
Rishi Sunak’s government has taken this opportunity to soften its stance on green policies in order to prioritise the cost- of-living crisis. This means “delaying or even abandoning” environmental policies if it led to direct costs on consumers, hence avoiding the “hassle” to households when attaining crucial climate goals. Jacob Rees-Mogg, Conservative MP for Northeast Somerset, declared on the matter “that there are things we can change that will be electorally successful.”
This makes one question the motives of the leading party and its ability to balance two critical objectives: protecting struggling households and protecting the climate. In the meantime, although both parties have opposed the ULEZ expansion, the High Court declared it legal a week after the by-election result. Five Conservative councils chose to fight it out in court in a desperate attempt to label the plan as flawed, and yet the Mayor succeeded in his battle against the Tories and the trivialisation of air pollution. It’s times like these when we can observe short-termism and the desire to remain in power.
Meanwhile, across the Atlantic, Republican candidates have vocalised their opinion on Environmental, Social, and Governance (ESG) investment strategies, creating doubt amongst US citizens about their adequacy. Vivek Ramaswamy, founder of Strive Asset Management—a company that currently holds 26 anti-ESG funds—and called on social media followers to “abandon climate religion” and “embrace fossil fuels.” Ron DeSantis, governor of Florida and the man who officialised anti-ESG legislation in May, wishes that state officials no longer invest public money into ESG goals. He leads an alliance of 18 US states to push back against Biden’s green policies, which he believes are “destabilising the American economy and the global financial system.” Lastly, the chief of political bluntness, former President Donald Trump. During his administration, he restricted retirement funds from investing in ESG-focused assets, which he sees as “radical left garbage.” Indifferent to his criminal accusations, Trump promises to take fresh action to promote his anti-ESG outlook. One of these men could soon be leading the world’s largest economy, to what could be its planetary demise.
But the proof is in the pudding: anti-ESG funds are struggling to attract investors and aren’t showing signs of long- term success. Ramaswamy’s company was mostly responsible- ble for their increased attention in 2022, but pro-ESG funds have gained far greater traction, with global sustainable assets hitting $2.8 trillion at the end of June. Companies are carrying out their duty by preparing for climate change and contributing positively to the UN’s Sustainable Development Goals.
Investors tend to take either a “divest” or “engage” (to help transition towards net-zero) approach when it comes to fossil fuel companies, but the Republican candidates above have audaciously chosen to defend their work in the interest of financial return. As of 2022, the US produced 20% and consumed 21% of the world’s oil output, making them a great beneficiary of the industry’s success and simultaneously the second largest contributor to global warming. What’s more concerning is President’s Biden’s hypocrisy with regards to halting public financing for fossil fuel production, a promise made by the US and 38 other countries during COP26. The Democratic administration continues to approve new public funding for fossil fuels, such as providing $100 million in export finance to expand an Indonesian oil refinery in May.
This is a country which can have the greatest impact on the world’s carbon footprint, but actions speak louder than words for both the Republicans and the Democrats at this stage. Wildfires in Hawaii, floods in Vermont—why haven’t politicians got the climate memo yet? According to the Pew Research Center, two-thirds of American adults want the country to prioritise the development of renewable energy and believe large companies are doing little to reduce the effects of climate change. Yet only 37% of Americans see climate change as a priority for Congress in 2023.
This brings us to the UAE, a country rich in oil reserves and the host of the upcoming COP28 summit. November 30th will see over 140 heads of state unite to discuss issues such as emissions reductions, sustainable agriculture, and energy security. Dr. Al-Jaber, the President-Designate of COP28, has outlined key areas of focus, including fixing climate finance for the most vulnerable countries and fast-tracking the energy transition.
The UAE is currently undergoing a major energy transition, aiming for 44% clean energy by 2050. Its green initiatives include three of the world’s largest solar plants and the region’s first industrial-scale carbon capture facility in Abu Dhabi, created by the Abu Dhabi National Oil Company (ADNOC). Nevertheless, ADNOC’s 2022 sustainability report documented the company’s carbon emissions at around 24 million tonnes, indicating that direct air capture would only remove 2% of this. So is it really fair for the UAE to be hosting COP28? Is it just another developed country using greenwashing to present itself as a climate leader? One cannot comment on this yet, but the UN summit will show who is willing to make a greater change. For now, one can only say that the UAE has the potential to be a global climate leader, hoping that it will take responsibility for its contributions to global “boiling,” and encourage other powerful nations to do the same.
Ending on a more optimistic note, Kenyan President William Ruto spoke to the FT about creating a global green bank to replace the IMF and World Bank on climate matters. He believes this will help countries to focus on the issue at hand, where the least polluting countries are suffering the most. Ruto identified that “where there is a contest between national interest and a global good, national interest will always win.” One can only agree with this due to the examples mentioned above, as well as countless other examples of countries forgetting the consequences of their actions. Dr. Al-Jaber visited Nairobi in August and aligned with the President’s idea of rebranding the world’s financial architecture to target climate change. If all goes well, this initiative amongst others which the UAE has planned, could be revolutionary in shifting the mindset of the world’s political leaders.